A MAJOR shake up of the benefits system will start in just days.
The government has given the greenlight for millions on legacy benefits to start moving on to Universal Credit.
Managed migration will start from May 9 with to get over two million people still on the old style benefits system moved to Universal Credit.
Initially this will start with around 500 people but the goal is to move everyone over by the end of 2024
Universal Credit is replacing six benefits under the old welfare system, commonly called legacy benefits. They are:
- Working Tax Credit
- Child Tax Credit
- income-based Jobseeker’s Allowance
- Income Support
- income-related Employment and Support Allowance
- Housing Benefit
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Anyone who has a change of circumstances can already be moved over to Universal Credit.
And you can chose to switch if you think you'll be better off – but not everyone will be.
Those who don't move over under these circumstances between now and December 2024 will eventually switch under managed migration.
Who is affected and will I be better off?
The government's own calculations show that there are 2.6million people currently on legacy benefits.
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Many will move over between now and 2024 naturally through a change of circumstances, like moving home or having a baby.
It's estimated that 1.4million will be better off on Universal Credit.
A further 300,000 will see no change to how much they get, while around 900,000 will be worse off under Universal Credit.
Anyone worse off will get transitional payments to top up their income to the same amount.
Around 600,000 will get transitional payments to top up their income – but face potentially having their payments frozen in future.
But transitional payments are only available through managed migration.
If you chose to move over and are worse off you won't get them, so you need to check carefully if you'll be better off and wait to be moved if not.
A benefits checker can help you understand if you'll be better off or not.
Using an online benefits calculator can help you compare and are free and easy to use from charities such as Turn2Us and EntitledTo, and it's also worth asking them for advice.
Once you move over, you won't be able to go back to legacy benefits.
The majority of those who are expected to get transitional payments – around 400,000 – are claiming Employment Support Allowance (ESA).
Around 100,000 are on tax credits while fewer than 50,000 each on other legacy benefits are expected to be affected.
Examples of those who may be entitled to less on Universal Credit according to the government include:
- Households getting ESA who and the Severe Disability Premium and Enhanced Disability Premium
- Households with the lower disabled child addition on legacy benefits
- Self-employed households who are subject to the Minimum Income Floor after the 12 month grace period has ended
- In-work households that worked a specific number of hours (eg lone
parent working 16 hours claiming Working Tax Credits)
- Households receiving tax credits with savings of more than £6,000 (and up to £16,000)
Eventually anyone who hasn't moved over to Universal Credit will be notified that they will be switched.
If you do find you're better off on Universal Credit you can start making a claim straight away.
But beware that your benefits will stop, and you will have a five week wait for your first Universal Credit payment, which could leave you short.
You can get an advance, which is interest-free, but you'll pay this back in instalments from future payments which will reduce how much you get each month.
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Moving to Universal Credit can affect other benefits you get, so check this carefully too.
For example if you're getting council tax help you'll need to tell your local authority you've switched to Universal Credit.
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